Hot Topics:

Business columnists

Enid Ablowitz: How much do people give?

By Enid Ablowitz, For the Camera

Posted:
09/22/2012 04:59:07 PM MDT

Updated:
09/22/2012 05:00:14 PM MDT

The Chronicle of Philanthropy recently released a very interesting study entitled "How America Gives." It reported the following key U.S. giving profile statistics based on 2008 data (the latest available info from the IRS):

Total contributions: $135.8 billion (based on people with incomes above $50,000 who file itemized tax returns and including gifts to religious organizations)

Median aggregate contributions: $2,564

Percent of income given: 4.7 percent (calculated as "the percentage of their income that households donated from the money they had left after paying their taxes and covering housing, food, and other essential expenses")

The Chronicle has created an interactive website tool at philanthropy.com that can break down giving by state, city, and even zip code.

How did we fare?

Colorado total contributions: $2.4 billion (ranked 19) with a median contribution of $2,317 representing 4.2 percent of discretionary income given

Boulder County total contributions: $195 million with a median contribution of $2,534 representing 4 percent of discretionary income given.

City of Boulder: $90.1 million with a median contribution of $2,808 representing 4.1 percent of discretionary income given

Among other things, the report's data analysis indicated that:

Advertisement

"People who make between $50,000 to $75,000 give an average of 7.6 percent of their discretionary income to charity compared with an average of 4.2 percent for people who make $100,000 or more."

"When people making more than $200,000 a year account for more than 40 percent of the taxpayers in a ZIP code, the wealthy residents give an average of 2.8 percent of discretionary income to charity."

"Religion has a big influence on giving patterns... When religious giving isn't counted, the geography of giving is very different."

Some of the Chronicle's conclusions were:

"Middle class Americans give a far bigger share of their discretionary income to charities than the rich."

"Rich people who live in neighborhoods with many other wealthy people give a smaller share of their incomes to charity than rich people who live in more economically diverse communities."

"Regions of the country that are deeply religious are more generous than those that are not." They cited, for example, the Bible Belt and also states with a high concentration of Mormons who have a tradition of tithing at least 10 percent of their income to the church.

The Chronicle also states "the reasons for the discrepancies among states, cities and neighborhoods are rooted in part in each area's political philosophy about the role of government versus charity."

But there's a caveat in interpreting this data. If you look more deeply into how the information was compiled, the data only includes reported charitable deductions. That means only itemizers were counted and that bequests may not have been included.

It is also likely that some of the gifts included were not gifts of discretionary income, but, rather, outright gifts of assets that would have the effect of increasing the charitable deduction in a given year and therefore the percentage of discretionary income.

These factors might partially explain the difference between this report and the earlier Giving USA estimates of $214 billion of giving by individuals during the same year.

The Chronicle of Philanthropy's research analysis also indicates that when only secular giving is counted, the patterns change dramatically and they cite significant changes in the states' rankings: New York moves from No. 18 to No. 2, and Pennsylvania rises from No. 40 to No. 4.

While the research is interesting and the observations eye-catching (they even talk about the red/blue "giving divide") to use the ratio of charitable deductions to discretionary income may skew the results.

People give from income, but they also give assets (like real estate) and take deductions over a period of years to reduce their tax burden. They give insurance policies. They set up charitable trusts. They make testamentary gifts upon their death. And none of the data includes a way to quantify the gift of time through volunteering.

Many people wonder about what is the "norm" for giving. How much to give is a very personal matter, but as people seek guidelines, it is important to fully understand what the numbers mean. Make sure you are looking at the whole picture, not just "the trunk of the elephant."

More importantly, know which organizations will help you achieve your philanthropic goals, then make your annual gifts, and plan ahead to take full advantage of 2012 charitable tax strategies for strategic outright, capital and deferred gifts.

Enid Ablowitz, CFRE, CPGS, has been a non-profit leader and donor advocate for more than 20 years. She serves as the associate director for the University of Colorado's Coleman Institute for Cognitive Disabilities and as vice president for strategic philanthropy for the University of Colorado Foundation.

Lightning has 5A state title aspirations once againIt was the only home plate the Legacy varsity softball field had ever known, and there it was last Saturday, in its tattered state, dug out of the playing surface and relegated to a lonely, unused existence. Full Story

The Boulder alt-country band gives its EPs names such as Death and Resurrection, and its songs bear the mark of hard truths and sin. But the punk energy behind the playing, and the sense that it's all in good fun, make it OK to dance to a song like "Death." Full Story